Liability of Defense Contractors for Hazardous Waste Cieanup Costa

• Author: by Captain Margaret O. Stembeck
• Pages: 02

I om directing the Attorney General end the Adrntnistrotai of the Enuironmentol ProtectLon Agency to use euer) tool at their disposal to speed and toughen the enforcement ofour laas against tom waste dumpers I want faster cleanups and tougher enforcement of penaltres against polluters [Address by President Bush to pint se~sion of Congress, February 9, 1989,'l

1. INTRODUCTION

   The 1980 Comprehensive Environmental Response. Compensation and Liability Act' (CERCLA or Superfund) was enacted to address the threat posed by the 30-50,000 improperly managed hazardous waste sites in this country and to provide emergency response to hazardous waste spllls The Act reqmres responsible parties to clean up hazardous waste sites and other dangerous chemical releases or to reimburse the government for the cost of cleanup' Hazardous waste cleanup liability under CERCLA extends to pa8t and present awnerr, transporters, and generators of hazardous waste! CERCLA imposes

   strict, joint and several liability on these Potentially Responsible Parties (PRPsl

   The Superfund Amendments and Reauthorization Act !SARA, pro. ndes that CERCLA a~olies to facilities owned or ooerated bv a de- 'Judge Advocate General 3 Corps Currenfli arriened LO Envmnmenfal Lax Dlrl-sun Office oiThe Judge Advocate General Preilousl) assigned to Oifire of the Judge idvocare U S irmv Europe 1986-61. as SenlorTnsl Cavniel and Chleioilnternatlon-

   ngiosi Wash Poat.Feb 10 1989.afA20 col 3

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   "Sea e E Emfed Stater, Canierration Chem Co ,589 F Supp 59.62.63 f\V D hla 1961 Lmted Srater Y Chem-Dyne Coip 572 F Supp 802 805 810 S D Ohia 19b3

   partment. agency, or matrumenralit, of the United Stares.' The De. partment of Defense rDODi 1s therefore B PRP for cleanup costs at DOD facilities. as either an owner. transporter, or generator of hazardous waste a Currently. DOD haa identified more than 5,000 sites needing hazardous waate cleanup: and DOD plana to spend about $EO0 m1llmn on hazardous waste cleanup ~n the next fiscal year

   In many eituatmns. DOD contractors share DODs CERCLA Iiabil. 11)- far hazardous waste cleanup costs at DOD facilities. While DOD may be liable as an owner. contractors often are liable as operators. transporters, or generators of hazardous waste " \+'hen CERCLA does not impose liability on DOD (for example. for hazardous waste cleanup at contractor-owned, contractor-operated faacilniesl, DOD may share liability far hazardous waste cleanup cost3 wth the contractor under the terms of the contract

   This article examines the relatmnship between DOD and DOD contractors concerning hazardous waste cleanup costs" where CERCLA imposes some contractor Iiabilit)- The article first discusses DOD and contractor responshilit) for hazardous ivaste cleanup toss under the prmismns of CERCLA Applicable federal and DOD contracting regulations will then be examined to determine how these contract prowsions modify the responsibility ofDOD and DOD contractors to pay

   -Pub L Sa 99-499 h 120 100 Stat 1611 #codified at 42 V S C 9620 SUPP I\ 1966

   19891 HAZARDOUS WASTE CLEASUP

   for hazardous waste cleanup. First, federal procurement regulations concerning allowable costs in cost.rembursement contracts and increased pnces in fixed.pnce contracts will be discussed. Next, the dis. cusmon will explore the possibility of obtaining liability insurance to cover cleanup costs. Finally, the avadability and effect of government indemnification of contractors for hazardous waste cleanup costs will be discuased In conclusion, this article suggests B Structure for future government eontracts to fairly and efficiently allocate the costs of hazardous waste cleanup between DOD and DOD contractors to en.sure the availability of essential goods and serv~ces to DOD

   11. CERCLA LIABILITY FOR HAZARDOUS WASTE CLEANUP COSTS A. POTEJTIALLY RESFOAVSIBLE PARTIES

   CERCLA section 10ilal provides that four classes of persona may be liable for costs incurred in response to the release and cleanup of hazardous substances response costs"1 and damages to natural resources: 1) the owner and operator of a vessel or facility ithe current "oumr"!; 21 any person who at the time of disposal of any hazardous substance awned or operated any facility at which such hazardous substancea were disposed of (past ''owners'?, 3) m y person who b>-contract, agreement, or otherwise arranged for disposal or treatment, or for transport for disposal or treatment of hazardous substancea t"generatora"l. and 41 any person who accepts or accepted any hazardoua substances for transport to disposal or treatment f m l n m

   Current owners are liable for hazardous wa~tecleanup costs even if

   they did not own the site at the time of disposal or cause the release of the hazardous material." Past owners are liable if the hazardous waste was disposed" of at the site at the time of their ownership

   I"transporters"l.'3

   1342 U S C i 960iia8 11962,

   "Sei, e 8 Neu Tark \ Share Realty Carp is9 F 2d 1032. 1014 12d Cir 19858iound liable far C ~ P to cleanup hazardous materlal dliposed on i s

   weient

   of CERCLA. DOD 1s potentiall? liable ai waste cleanup costs at any goiernment udes facilities ahere the government op-erates all of the activity (government owned goveinment operated or GOGO) facilities operated at leait in part by private contractors wrernment owned contractor operated. or GOCOI. and facilities owned by the government but leased to private parties I'

   facilmes. the contractor ma)- also be liable under section 10 an ' operator

   Contractors and other private parties operating on government

   hazardous ivasie cleanup COSTS even If they did not generate the hazardous substance "' The critical question 1s whether the PRP made arrangements for disposal of the hazardous w a t e

   Seetian 1078a1138 liability includes peat generators of hazardous waste who merely arranged for disposal or transportation of hazardous material to a faeilir? from which a present release IS

   threatened or occurring '' 4 pereon "cannot escape liability by 'con. tracting aaay' lhisl responsibility or by alleging that the incident

   XIS caused by the act or ommmn of a third party."" In other words. lt 1s not necessary that the generator hare anything to do with the

   19891 HAZARDOUS WASTE CLEANUP

   release that necemtates clean up If the person arranged for dispos. al. he or she is a PRP.

   Contractors and other parnee operatmg on government owned facilities will be liable for CERCLA cleanup costs ~f they made arrangements to dispose of the hazardous waste that needs to be cleaned up These partie8 will not be able to escape CERCLA hablhty by arguing that they did not own the waste or camay also be liable under CERCLA sectton 1@7(ahazardous waste for disposal

   At contractor owned. contractor operated iCOCOl facilnier. the contractor IS potentially liable for CERCLA cleanup costs aa etther an "owner". "generator" or "transporter." Thls hablhty 1s not shared with the government under CERCLA. unless the government arranges for disposal of the hazardous waste.26

   2. RESPOSSE COST LIABILITY

      Under the provisions of CERCLA, DOD and DOD contractors uill often be PRPs for costs associated with the clean up of hazardous waste. CERCLA section 1 0 7 ~ provides that PRPs are liable for "a release. or threatened release [of a hazardous substance1 which causes the occurrence of response costs "Release" 18 defined m sec. tion 1@1(221

      86 "any spilling, leaking, pumping, pouring emitting, emptying. discharging, Injecting, escaping, leaching, dumping. or dm-posing into the environment. "'

      A ''release'' Includes, for example, leaking tanks and pipelmes. seepage from earlier BPLIIS, and leaking drums of hazardous materials 28 A "threatened release" may include corroding or deteriorating tanks, the owner's lack of expertise m handling hazardous waste, and even the failure to license the facility

      When there 1s a release of a hazardous subBtance.3' PRPs are 11- "Sea s e , Ner iark s General Elec Co , 592 F Supp er 257 In this case. the d&ndant;dddrum% of vied transiormer 011 containing hazardous rubetances to a drag &trip The defendant argued that he had not arranged for dirpmal oithe waste because he iald the 011 to be used a i the drag ~ f r q mner b a ~ fit and did nor enter mlo anagreement IO havetheolldepoiltedoralheruIleplacedonthe dragstrip Rejecting this ar umenf rhe conrt held the plaintiffrar a PRP under section lOila 831

      '%,en if CERCLA impores no habillti on the eowrnmenf the miernmenf may

      "Id S 96011221*%er York v Shore Realt) Carp, 755 F 2d 1032, 1045 82d Clr 19851' 9 d at 1045"CERCLA defines "hazardour substance" by reference to other envlmnmenlal stat-utee 42 L' S C B 1011141 (1982, Generally. the term refers to walfei that may cause en~ncrearên marfahfy or threaten hvman health or the enviianmenf when improilerlv treated. stored. transported, OT dispoced See. e g 42 US C b 690315) 115821

      able for. 11 all costs of removal or remedial action incurred by the United Starea Government. a State. or an Indian tribe not inconsistent with the national contingency p l d ' 21 any other neees-sary costs of response incurred by any other person Conbistent with the national contingent? plan. 31 damages for injur? to. destruction of. or lass of natural remurcei: and 41 the costs of any health assess-ment or health effects crud, carried out pursuant to CERCLA ''

      Response c o d 3 are incurred in two types of cleanup actions. 1, remedial action." or long term or permanent containment or disposal programs. and 2 , removal actions or short term cleanup arrangements For purposes of this article the term "cleanup cmts" refers to liabilities generated by both remedial and removal actions

      'The United Stares Ennianmental Protection Agency iEPAi ma> seek recorer! of response cos3 from DOD or DOD contractors for hazardous waste cleanup at federal facilities. EPA's enforcement pro-C~SBfor executive branch agencies purely admmistratiie. however. and does not provide for civil jud al action or assessment of...